Last year, the unemployment rate was 4 percent and the inflation rate was 3 percent. If the natural rate of unemployment is 3 percent, how do you expect inflation to change?
What will be an ideal response?
Inflation is only stable when the unemployment rate is equal to the natural rate of unemployment. Since last year's unemployment rate was above the natural rate of unemployment, the inflation rate will eventually increase as the economy moves up the short-run Phillips curve.
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If the marginal private cost of producing one kilowatt of power in California equals five cents and the marginal social cost of each kilowatt equals nine cents, then the marginal external cost equals ________ per kilowatt
A) five cents B) nine cents C) four cents D) fourteen cents
A price-discriminating firm will always maximize profit by following the condition that
A. MR > MC. B. MR > P. C. MRa = MRb = MC. D. MR = ATC.
Suppose that when the price of oranges is $3 per pound, the quantity demanded is 4.7 tons per day and the quantity supplied is 3.9 tons. In this case:
A. excess supply will lead the price of oranges to fall. B. excess demand will lead the price of oranges to fall. C. excess demand will lead the price of oranges to rise. D. excess supply will lead the price of oranges to rise.
The price at which the quantity supplied equals the quantity demanded is the
A. equilibrium quantity. B. market price. C. satiation point. D. equilibrium price.